UK: Braving the elements - companies whose sales depend on the weather. (3 of 3)

UK: Braving the elements - companies whose sales depend on the weather. (3 of 3) - At Pifco, Webber too accepts the inevitability of the ups and downs. "We're committed to the market long term. If we have a few bad years we gird our loins and stomach it.

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Last Updated: 31 Aug 2010

At Pifco, Webber too accepts the inevitability of the ups and downs. "We're committed to the market long term. If we have a few bad years we gird our loins and stomach it. Our corporate strategy is to have a few eggs in many baskets. We have a range of 250 products (in small electrical appliances under the Pifco, Salton and Carmen brands), so we're not dependent on any one area."

That is a lesson that some of the ski equipment manufacturers could have learnt better. After years of almost guaranteed growth in the 1970s which reached a world peak in 1979/80, the industry became less predictable in the 1980s and has suffered badly from the lack of snow in Europe in the past three years. In the course of the past decade most of the manufacturers took steps to safeguard what had become a vulnerable position by broadening their ski equipment portfolios and diversifying into counter-cyclical products in the summer sports industry, notably tennis racquets and golf clubs.

But perhaps it was too late. Even the leaders are making losses, though they still claim to be maintaining production. However, the pressure is showing: at industry leader Rossignol, management is negotiating with the unions to modulate the number of hours in the working week to reflect the peaks and troughs. Says general secretary Jean-Jacques Bompard: "We want to produce less in the first part of the production cycle and more when the orders come in. Thus from November to March it might mean a 34/35-hour week, while from March onwards it would be 44/45 hours, or a variable of 10 hours."

In the past the company used temporary workers to meet the peaks in demand, but management reckons that the proposed new system would improve quality as all the employees would be permanent. Coupled with new computer-controlled production, Rossignol believes that it could reduce the risks inherent in production of skis.

For the smaller manufacturers the pain is more intense. At the German producer Voelkl, which relies on central Europe for 70% of its sales of skis, the 390 ski production workers are on a two to three-day week and those leaving through natural wastage are not being replaced. Chairman Franz Voelkl freely admits that "we have reduced our production in the year 1990 substantially". If this winter is bad, plans for a new branch factory currently under construction may have to be reconsidered. If it is good, Voelkl stresses the need for caution: "Each manufacturer can only take a restricted risk. You can't have unlimited quantities of goods in stock and hope to sell them. If you do and the remainder have to be sold at reduced prices, it will have a negative effect on brand image."

Meanwhile ski manufacturers are hoping to compensate in part for reduced sales in Europe with gains in the Japanese market, which is growing strongly. Further down the supply chain, however, distributors report that Britain's ski equipment retailers are in dire straits. In the UK sales of skis are down 30% and boots down 25%. Roger Morrison, sales director of Europa Sport, which distributes Nordica boots, Dynastar skis and Look bindings in the UK, paints a depressing picture: "We deal with 260 accounts and there have been 20 bankruptcies between February and November. It will take two good winters to put the industry back on a useful plane."

Morrison retains a note of optimism, however, pointing out that after three mild winters in Australia and New Zealand, this year they had the best conditions in 15 years. That is a comforting thought for European manufacturers as they welcome the early snowfall and eye the mountains nervously. But with scientists predicting worsening skiing conditions as the 21st century progresses, the next generation may have cause for serious concern. The only consolation is that there will probably be burgeoning opportunities in industries depending on sun and high temperatures. Even at that end of the thermometer, however, the only certainty will remain the uncertainty of the elements - for a long time to come.

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